Money and Banking Chapter 10

Currency Video Notes 1. What did we use before currency? 2. The first coins were minted around (place and time)? 3. What is considered currency? 4. Our money is called _____money. 5. Bills are made of what two things? 6. How much counterfeit money is in circulation? 7. What is done to combat counterfeiting? 8. Many European countries use the same currency, the _____________.

Currency Video

Medium of Exchange—something accepted by everyone as payment for G & S. Functions of Money Unit of Account- used to express worth --dollars and cents Store of Value- allows purchasing power to be saved until needed

--should not deteriorate when being held as a store of value Characteristics of Money Portability --easily transferred Durability --should not deteriorate when being held as a store of value

Divisibility --divisible into smaller units Limited Availability --money loses its value when there is too much of it

Portable, Divisible, Durable and Limited Availability

Take out a dollar bill if you have one.

different currencies from states National Currency --there were over 10,000 different currencies from states --In 1863 the gov’t issued gold certificates (currency backed by gold) and in 1886 added silver certificates

Video #2 How much money is there on Earth? Write down the questions and answer as the video plays (OPEN NOTES QUIZ TOMORROW)

1. On average, how much money does a bank have in its vault 1. On average, how much money does a bank have in its vault?  from ____ to ______ 2. How much change does the typical American household have laying around? What does M1 include? What does M2 include? How can a person increase or decrease the money supply (this is illegal)?   Bills have traces of drugs on them.  Why is the percentage so high? Why is money so dirty? Give an example of commodity money:   We use _____________________ money. What gives our type of money value?  

Time to Get Creative!!

Create your own currency bill Amount--can be any amount Design to prevent counterfeiting on BOTH sides. Picture (of someone or something that is important to you), year and your signature on the FRONT Saying on the BACK (ex: e pluribus unum) Must be done in pen/marker and have at least 2 colors.